tonight. tomorrow annie potts is here and jaunt janet huber. i'll see you then. good night everybody. >> i'm jennifer granholm. tonight in the war room, the loss of 18,000 u.s. jobs is a painful and tragic lesson. the question is, will we learn from it? the best thing about eating a twinkie was the middle. we want to know what changed? the quick answer, is everything. everything always changes. there's a bridge that spans what is old and what is new for most

things in life. the biggest trick is figuring out which side to stand on. let's start tonight with some hot political news. there is a fire storm in washington over a move that the president hasn't even made yet. as you may have heard he's reportedly considering nominating susan rice to replace hillary clinton as secretary of state and already the republicans are on the offensive. they need to come out strong, because they're in the senate minority next term 55-45. the dems need 60 vote to overcome republican fill buster, so they need five republicans to join them if they want to confirm rice. republicans stall worth john mccain and lindsey mccain have

come out strongly against her citing the benghazi attacks and her remarks. today, moderate republican susan collins indicated that she might feel similarly. collins and republican senator bob corker had a 75 minute meeting with rice and afterward they still don't sound convinced. >> i still have many questions that remain unanswered. >> there's a handful of people that the president surrounds himself with that all of us hold to a very different level, and the secretary of state no doubt is one of those. we want someone of independence. >> well, president obama and secretary clinton both rushed to her defense. >> i couldn't be prouder of the job she has done. >> susan rice has done a great

job as our ambassador to the united nations and of course, this decision about my successor is up to the president but i'm very happy he has the opportunity with a second term to make a decision. >> but they're not just going to have to convince props even some democrats were reluctant to overtly support her. jon tester said: >> joe manchin damaged it saying:

>> in fact, john kerry's name has come up. susan collins said he would be easily confirmed. senator baroso backed him. even john mccain, leading the charge against rice had high praise for john kerry on fox news yesterday. >> john kerry came within a whisker of being president of the united states. i think that works in his favor but i'd love to hear him make his case, but i don't have anything in his background like this tragedy in again gassy that would make me really want to carefully examine the whole situation. >> of course it doesn't hurt that if kerry took the job it would open up a senate seat that could go to republican scott brown who just lost his seat to elizabeth warren. joining me now to talk about the wrangling in washington and on the ground in massachusetts is

he is square magazine political reporter charlie pierce. welcome back inside the war room. >> good evening governor, just what we here in massachusetts need another reason to think we're the center of the universe. >> well you are the center of your own universe. what does is pour tend that these moderate republicans are not onboard? >> it pour tends that susan collins is afraid of a tea party challenge and they've decided that they're going to make an issue out of this woman. i don't know what she said except say something that wasn't accurate on the sunday shows. they are somehow hallowed. there's something offensive to the lord if you say something to david gregory that's inaccurate. [ laughter ]

>> so, do you think that the president will not name her anyway? is she not worth the fight? >> i think she's worth the fight. i hope he does nominate her. i hope he does not back down to this no one sense. this is falling all the way down the rabbit hole. i realize that for john mccain, there is no reality outside of the sunday talk shows but the rest of us don't know what he's talking about. >> that's exactly right. there is another wrinkle in the story. it was report that had susan rice holds as much as $600,000 of transcanada stocks, that's of course the company building the key stone pipeline which needs state department approval to go forward. do you think it has any relevance or could impact her nomination? >> this is actually something that should impact her nomination. this is a rather significant, i would think conflict of interest on an issue of

considerable importance, you know, certainly in the environmental community, and an issue that was brought all the way to the gates of the white house by the people who opposed the key stone pipeline. you want to ask her questions ask her about the pipeline, although i guarantee no republican brings this up. >> i fear that it might enhance her position in the eyes of republicans but that the folks on the liberal side are going to have a few questions about it. do you think this same report that mentioned this investment of $600,000 also states that she, susan rice hers could be worth as much as $45.5 million? i don't know about you but i was totally surprised to hear that. >> that's a considerable amount of money. >> yeah. >> this is somebody who does not need to play the powerball tonight. >> she doesn't have to go through this. she doesn't have to put up with

this. she could choose to take her money and go home but is choosing to serve. what happened from your perspective if john kerry is nominated? scott have the chance to take the seat? >> john kerry could be replaced anyway. this scenario could play out no matter what happens with susan rice. i know it's a popular theory. the popular theory depends on scott brown actually winning another special election. he damaged his brand in this last campaign. he had two things going for him electably moderate republican, and a nice guy. he is not a nice guy anymore. he certainly didn't campaign as a moderate. the idea if there is a special election scott brown will just walk into it is i think something, you know, popular among people who don't live here. he's got a lot of repairing to

do up here. i think he'd be better advised to run for governor next time. >> just on the kerry side, you know kerry is the 10th most senior u.s. senator chairman of the senate relations committee. aside from losing a democratic, a what would it mean for massachusetts to lose that level of seniority? >> i think that one of the really i mean and john kerry's mark in the senate really has been his work in foreign relations, and in the area of foreign policy. i think the senate would be losing a giant in that record. i don't know how that directly impacts the state of massachusetts, but certainly it certainly is never good to lose a senator with that much seniority. >> what about senator patrick of massachusetts. what would happen here? he's got two years left in his term. he could run for senate if he

left, i don't know if he'd have to step down, or he might even leave to go to a cabinet post. do you think scott brown might run for governor? >> i think he would be better advised to run for governor. now there's also talk and this being massachusetts where the democrats run everything and there are about 11 republicans left to complain, there's talk that they might 15 finagle the rules again that he's not old school democratic enough to do that. there was rumblings in the boston her and would that said that there was some talk on beacon hill that the democrats the legislature might go back to the old system that they changed so that mitt romney wouldn't get appointed to successor to let

did he havedeval patrick appoint a successor. >> i was just going to say what do you think patrick will do? >> i think he'll let the process take it. i think he'll serve out his term and move back into the private be world of private enterprise and big money law firms. >> i don't know. i think -- i disagree with you on that. >> you're not buying that. >> i'm not buying what you're dishing out. i think he'll go to the cabinet if not immediately eventually. i think he'll be a great attorney general when holder

decides to step down. i think he's going to washington. that's my guess. i have no inside knowledge. charlie pierce, thanks for joining us inside the war room. coming up, out with the old, in with the new or if you'd rather, what old is new again. house republicans elect a fresh set of committee chairs and show they have gotten the message to finally be more inclusive at least one of the 19 males has a goatee. >> plus, they weren't going to change the way they did things for anyone or anything. the anyone turned out to be 21 dead miners. the anything are criminal charges. >> later for more than 80 years, the twinkie didn't change that much, as for hostess where do we start? it's the war room on a wednesday

night. stick around we'll be right back.

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right by those who gave their lives to for this country nearly 70 years ago. [ ♪ theme ♪ ] >> the more things change in our society and politics, the more they seem to stay the same. today, house republicans settled on who's going to chair 19 committees in the 113th 113th congress. check this out. all 19 of them are men. there are still two open posts atop the ethics and house administration committees that remain unfilled. zero republican women leading the republican committees is one

fewer than the last congress. it's a very different story for democrats across the aisle. today, democratic leader nancy pelosi's office said six ranking members will be on the committees. sanchez, johnson slaughter waters and velasquez. the sixth is going to be a battle between marcy kaptur and

lowey. joining me is juana summers from washington d.c. welcome back inside the war room. >> thank you for having me back. >> let's look at the obama cabinet. it reflects incredible differs city, thediversecity. there may be some overlapped in numbers, but after the election, a lot of the republican campaign strategists made it clear that the gop needs to open its arms the women and minorities and gays and why aren't republicans getting that message if you look at that committee chairmanship appointment that happened today? >> that's an absolutely great point. looking at the 19 folks who are appointed all member, all white as you pointed out it does seem

to be out of step with what you hear from the republican party. we have to embrace the entire fabric of america. if you were to look at the house republicans as a math, there aren't a lot of options there. there aren't a whole lot of women, a whole lot of people of color to choose from. it's important to note there have been big gains in leadership rogers, wag nurse of missouri. in the way of an election, you saw very big divide between the people who had supported the president's reelection and mitt romney. >> for sure. we often wonder why legislation like, you know, the violence against women act or other important legislation the people really like, wonder why it's stalled. from your experience, do you think it's credible to conclude that the lack of die seriousty among committee chairs

contributes to grid lock. >> there's no question especially looking at the republican side of the aisle. there is a gender gap. there is quite a bit of grid lock in washington. speaking specifically about the violence against women act something i would argue with any issue like this is an issue that deals with domestic violence, rape, sexual saul, issues that disproportionately affect women. if you're not in the room, you can't make change. having a diversity of opinions at the table is critical. >> it's important for crafting the legislation and important for persuading your fellow members that this is a good thing. there are still two open committee chairs that the republicans are still waiting to appoint, ethics and house administration. any chance either one of those could go to a woman? >> that's a good point.

another publication made the case that it's not over yet these are still open. it's important to look at the makeup of those committees. they are not women who sit on those committees now. it's something we're watching closely. a lot of people hope to see a more progressiveclusive republican party hope to see a woman or someone who represents a view of america in the chairmanship as well. >> this is something we'll be watching. republicans are going to be watching that, too boehner has an opportunity to correct. we'll see if he does. funker oh the showdown on the fiscal cliff, president obama today met with middle class americans, corporate executives and he was urging supporters to use #my2k to determine how tax

changes would affect them. an schmidt tweeted: >> do you think it's a good idea to go out to the people as the president is negotiating with congress. >> i personally am a big proponent of anytime you're blinging people into the halls of capitol hill, this is one of the most polarized congresses we have seen. compromise has not been king of the hill for sometime now. i'm not sure it works. last year, bringing public pressure to the payroll cut extension through congress. i'm not sure it works this time, but it's an innovative way to get folks engaged. >> of course all of this

negotiation around the fiscal cliff, the president actually indicated today that he might be president-electable. he says he's not necessarily looking for income tax rates as high as they were under president clinton. secretary geithner is going to meet with congressional leaders tomorrow. do you think they will demonstrating some wiggle room, as well? >> i personally don't think it's that big of a banner sign. if there was actually a movement toward a deal, i think you'd see president obama meeting with these leaders in congress as opposed to cabinet aids. i'm hearing democrats still pressing the case. they're still making the argument that they want to raise taxes on that small percentage of americans. the white house has not put forth any specifics. depending how the president secretary goes, there is miles of space in between the two

sides on this one. >> all right. one of my favorite reporters juana summers with politico. thank you for joining us. >> up next, it has several layers. the story on the outside is far different than the inside. yes, as far as metaphors go, the saga of the twinkie takes the cake. all right make that metaphors and pun its. we'll be light back.

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>> as we reported, hostess went bankrupt after it was unable to resolve a labor dispute with unionized workers. the bakers union is fighting to make sure its voice is heard in the bankruptcy proceedings. it wants to make sure its members get what they're owed in pension payments and other promised benefits. the union has asked the judge overseeing the bankruptcy to appoint a member of the union to a group of trustees managing the winding down of the company. as it stands how to, no union members sit on the company's board and in fact, take a look at this. look at that! kind of looks like the new chairman of the gop house committee, doesn't it? the hostess board is entirely white male business executives,

no women no minorities. management has been called on to updating the product line and modernizing the plants and trucks. should unions be allowed even required to have a seat at the table? join meg now is larry cohen president of the communication workers of america. he is joining us from washington, d.c. tonight. larry, thanks for joining me inside the war room again. >> my pleasure. >> the hostess board is our point of entry for this conversation. it is made up entirely of business executives. if you look at companies for example in european countries like france and norway, you see many more females and more workers on company boards. larry, you otherwise all over the world. what do they do differently and how does that impact labor disputes? >> so it's all about public

policy. since post world war ii in europe, part of the focus has been on number one sectoral bargaining. it is a disadvantage to any company bargain thatting, because they bargain in the sector. a voice on the job at all levels including elected worker representatives, up through middle management on the boards of these companies. the difference is night and day. we look at german-based companies in germany with many employees on the board many of whom happen to be union members. the vice chairman of the board of supervisors is leader of the union there. it leads to a situation where the bargaining and management of the company see the employees as major stake holders. switch to hostess 50% pay cuts is what people were faced with if the management, the new management the fourth management in like six years was prepared to stay open.

how do we ever revive the american economy if people are expected to take, they've already had 25% pay cut in six years. that's not the american dream and that's not the way you make an economy work. they're way and you have whack. >> you raised the issue of germany. many point to it's robust economy and manufacturing sector who would resist here worker representationen oh the board of directors. how has the actual representation impacted labor strife over in europe, for example? >> you know, there is some strife, but i think there is also more of a sense that we're all in this together. as you point out i mentioned germany, but it's, you know, france all the way through the nordic countries.

the other thing that's key is in a newly emerging democracy like brazil the workers through collective bargaining is four to five times the level of the united states. you have rising wages millions of brazilian workers coming into middle income status, able to buy the things they produce and a growing economy in brazil. here, the micro system of each employer trying to maximize profits at the expense of employees is leading us to a sled ride to the bottom. that's a large reason our economy is in such distress. >> it is wall street journal called the baker's union the union that brought the 85-year-old baker of twinkies and wonder bread to its knees. a conservative reds blog state

was: >> so how come we are so behind. what kind of impact does the demonization of unions have on negotiations answered as you mentioned, you talked about the economy, but can we do something to thank you the public perception of unions? >> i think we can. i think we have to make iter clear and the way you framed this is perfect that the reforms we need can't just be for union workers, but we need to figure out how all employees have a meaningful voice and sort of build from there. there's a lot in the european or brazilian or argentinean model about participation at all levels including the enterprise making a go of it. that doesn't mean management shells out to an equity company to further out how they can further cut wages and dump workers and then we realize thatten oh the macro level the economy will never revive. we will never deal with in in come

inequality or bring back demands. >> we exacerbate income inequality. we were that talking about hostess to modernize innovate, diverse tying their product. what model should america use going forward in addition to the changes on the board? are there other specific things that you would recommends to the united states for flexible labor policy? >> yeah, well again as you framed this up, we need to start with the premise that we're not going to have a successful economy or successful enterprises if employees are viewed as another means of production. they've got to participate at

every level. you can't participate at every level and have wage cuts, pensions destroyed and health care gutted. it's about how do you mix a sense of participation and a sense of collective well being of all stake holders not just the owners. how do you strike that balance between investment in the business and a payoff for the owners? i think that's a big challenge for us in a country where right now, almost no private sector workers have collective bargaining or participation in any form. now we have to sort of pick ourselves up and say what are we going to do about this. we are the ones out of whack in terms of global democracies and we are going to need to figure out, you know, how to say to american employees it's not just about getting more education. too many people believe that will solve this. it's about getting a voice restoring democracy the money in politics, all kinds of issues that are about what stake do we each have in this country it

can't just be about the 1%. >> that sounds like value based bargaining to me. that's larry cohen so grateful to you for coming inside the war room. >> always a pleasure. great work. >> all right, thanks. >> up next, if you're a casual observer of the media you're probably thinks that hostess's problems of a result of a bunch of no good greedy bakers. there are considerable gaps in that narrative and we're going to fill them in like a cream-filled treat. that's next, and we'll be right back. just use your citi card and register your purchase online. have a super sparkly day! ok. [ male announcer ] now all you need is a magic carriage. citi price rewind. buy now. save later.

so check out the web site. just google elizabeth warren. i think i want to write her a check plyself. i would really love to see her join the ranks of the united states senate and get rid of scott brown. 1-866-55-press.

>> i only see the hostess twinkies. >> to kids, i'm as real as the taste of that moist cake and

creamy filling. >> try one mom. now do you see him? >> i'm beginning to. >> hostess twinkies cupcakes and fruit pies. with hostess tasting is believing. >> that is a classic hostess twinkies commercial from the 1970's, when the company was riding high in the saddle. the company filed for bankruptcy this month and wants the winddown of that bankruptcy is over all hostess employees are going to be let go, it's likely. some in the media of course are vilifying the bakers union for the company's demise. many said if the union had not struck and rather had agreed to steeper concession that the company would still be in business. our next guest said the real villain here is the bakery workers. coming to us tonight from berkeley is university of california professor harley

shaken who specializes in labor issues. glad to welcome you inside the war room. >> very glad to be here. >> let's talk about this hostess thing. there was a disagreement between two of the hostess unions, the bakers and the teamsters, one wanted to take the deal, the other did not. many in the media are blaming this for the bankruptcy. do you think that's fair? >> i don't. i think it really misses the target of what's going on here. this is really about a company that was a 1950's, let alone 1970's icon, combined with 21st century hedge funds and the result has been bad disastrous for the company tragic for the workers and harmful for communities and the economy. >> well, the company was asking,

if i understood this right, they were asking the bakers to take a 50% pay cut from i think $48,000 a year to $24,000 a year. this was over a couple of stems. this was going on while the c.e.o. wants to pay executives nearly $2 million in bonuses. that disparity, of course, is a great affront to those who are working. from your perspective as a specialist in this, what can be done to prevent the massive pay disparities that you're seeing in many u.s. companies where the c.e.o.'s get millions and the workers get the shaft to quote a famous line. [ laughter ] >> well, this is really a critical issue not simply for union workers but for all of us. it's the economy that suffers when you have a highly distorted income distribution and the u.s. is getting far worse than it's

been historically. we're back to the last part of the 19th century in many ways in terms of income distribution in this country. if ordinary americans can't afford to buy things, the economy itself suffers. >> right so you studied this around the globe do european, asians have these massive pay disparities. >> no, the sufficient is far worse. for example, in 2010, the top 1% in the u.s. had over 20% of the total income distribution. in france, it was 8%. in sweden, it was 7%. even in japan, it was 10%. so in a way, we can no longer compare ourselves to europe or japan. we have to compare ourselves say to south america the most

unequal distribution in the world. in that year, the u.s. had a more unequal income distribution than argentina. it rivaled columbia. >> what many people may not know is when host he is emerged from bankruptcy in 1969, it had $679 million in debt. it was in bankruptcy once. that amount of debt is 50% more than it had when it went into the bankruptcy. a lot of that is due to hedge funds, et cetera and those who were taking profits from it or loading the company up with debt. how's the company allowed to emerge with more debt than it went into bankruptcy with? >> that is astonishing. it went into bankruptcy with the debt of $450 million.

to emerge five years later with $670 million of debt was such a heavy debt load, it almost predicted failure. what would have been very unusual is if hostess didn't slip further into bankruptcy. what it reflects is interest hedge funds that were more interested in maximizing their return in the shortest possible wait through increasingly complex and obscure financial nichelations, trying to get that money at the expense of concentrating on baked goods. you have sophisticated financial manipulation and the eye complete off the ball when it came to the core business. >> who would you say are the real villains in this very sad hostess saga? >> well, a lot of things came into this.

it didn't happen overnight but very clearly, it was the financial sector in general, hedge funds in particular that resulted in a company just going down absolutely the wrong road, six c.e.o.'s in the last eight years, a complete mismarkment of the business and at the very end, the demand for heavy onerous concessions and putting the blame on the unions, the workers who drove the trucks, baked the product, gave their lives to this company and are bearing the brunt of this collapse. >> and being asked to pay for the mistakes of management. >> stick around. after the break we're going to talk about another story that involved short-sighted decisions, putting profits over people and the tragic consequence that is follows. you are watching the war room. it's only on current tv.

we'll be right back.

>> good evening from west virginia. we are live tonight. just down the road is the site of the worst mine disaster in this country in 26 years. all night long, we have been talking to the people in these hills. they are reeling from the impact of this tragedy. >> it's been more than a year and a half since 29 workers were killed at upper big branch coal mine in the industry's worst explosion in four decades. in comforting news for the families, the company's former president pled guilty today to charges that he conspired with unnamed executives to get workers to vital safety regulations. while the charges are not directly tied to the explosion

they do take aim at the corporate culture that led to the blast. the question is will today's developments at massey have impact on work conditions in other industries. back with me is professor harley shaiken. do you think that today's charges are going to lead executives at other companies to think twice before they skirt safety rules in favor of profits. >> i think they will have a powerful move in that direction. people are being held personally accountable. they face jail time, not simply fines. >> yeah, i think so, too. you know, as the fiscal cliff discussion approaches in washington, there is a lot of talk about budget cutting. do you worry about in this era of austerity that less money is going to be spent on things, important things like worker safety? >> i think we should all be deeply worried about that, because the risk of spending

less on safety is going to result in people being maimed, disfigured hurt, killed on the job, where it doesn't have to happen, the disaster at the upper big ben mine wasn't an accident. it was the result of a willful disregard of health and safety and a failure to enforce that effectively. in an era of budget cutting we risk repeating that. >> well, there were some other -- there was other news today out on the industrial front, which is we also learned that two b.p., british petroleum rig supervisors and former beep executive pleaded inning from charges stemming from the 2010 deep water horizon rig disaster. they claim their scapegoats for higher ups like former c.e.o. tony hayward. b.p. had fines on the civil

side. do you think that they were being scapegoated? do you think there is an effort to try to flip the lower level folks in favor of going after someone like the c.e.o. and should the c.e.o. be a target? >> oh, i can't speak to the guilt of the two that are charged at b.p., but one difference with massey is that it is going far higher up in the corporation. the president of a unit being charged and pleading guilty to felonies is an important step, but the prosecutors clearly have their eye on the c.e.o. at the time of the whole company. at b.p., that is not yet the case, but ultimately, it isn't who was guilty of the crime, it is who is the author of the culture and work patterns that result in these kinds of accidents that has to pay a price and be charged i think so we'll see what happens at b.p.

>> before you were on, i was speaking with larry cohen and we were having a discussion about whether workers should be represented onboard of directors, whether it should be a requirement that there be some state. do you think we should be doing that as a matter of policy in the united states? >> absolutely. because as a country, we have succeeded based on checks and balances. and checks and balances in the workplace requires workers having a real voice and a real say in what's going on. they're not simply factors of production. they are a vital part of any company. >> absolutely. u.c. berkeley professor harley shaiken, thanks for gottenning us. more after this.

>> in 1914, a midwest industrialist doubled the wages of his workers to $5 per day. he did it to decrees turnover and pay the workers enough money

to buy the products they were making. 1916, not only had the worker wages doubled but the industrialists profits doubled from $30 million to $60 million. in today's world an employer who doubles the salaries of workers regardless of whether his or her profits doubled too would be considered reckless, a communist, a rob a do duped. henry ford was many things, but a rube was not one of them. he summed up his business philosophy this way: >> today henry ford, the innovator of the assembly line would probably be called a lunatic for that philosophy.

we've talked tonight about he would oh and new models of labor and management and perhaps old leadership versus new. it's ironic i had to use the past to illustrate a bridge for the future. if we want to middle class capable of buying products, they should pay the wages that allow the workers to do so, not how little they can get away with, but how much they can afford rather than hoarding profits as the middle class shrivels. they should pay enough to let the middle class thrive. i am grateful for job providers. i want more of them. it seems in hindsight what struggling businesses need to do is modernize products and diversify their leadership and treat their employees well. that modernize diversify.

no great logic to apply that to the gop. if they want to move forward they need to modernize their political brand and diversify their leadership. their words after the election, they talked the talked. we need to reach out to latinos and stop alienating women. yesterday's appointments of those committee chairs shows to the grand old party is not listening to the new voices, and like hostess who did not listen to labor and had no inclusion on their board the gop is facing a crisis of exclusion a crisis of old versus new. that whether you are wonder bread or the grand old party seems some things never change, even when it's incredibly obvious to everyone else that they s